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News
News articles last updated on 07/13/2007 (2 New) ***********************************************************************************************************************************  Cipher1 Boosts Loan Quality and Reduces Losses Cipher Data Resources Creating a Revolution in Cash Flow Analysis Cipher1 Boosts Loan Quality and Reduces Losses Santa Ana, Calif., November 6, 2006 – Cipher Data Resources, a leader in cash-flow analysis and IRS income verification, has brought Cipher1, a revolutionary program, which eliminates improper and incomplete cash-flow analysis, to the mortgage-lending marketplace. Mortgage operations traditionally spend countless hours analyzing tax returns in a year, and the majority of those hours are spent by high-cost, senior employees. On average, tax return analysis to qualify a single loan takes approximately four hours…and that’s if the underwriter understands complex tax returns with income beyond the simple W-2 wages. Cipher1 reduces that time to less than an hour. Quick—and Easy Cipher1 enables loan-processing personnel to easily and intuitively generate reports that fully analyze all types of borrower incomes. It automatically takes users where they need to go. No in-depth understanding of Schedule Cs, K-1s, Schedule Es for rental properties, partnership returns, S-Corps, or other schedules is required. Cipher1 walks users through tax returns step-by-step, requesting whatever tax data is needed. And the results are easy to track and defend. Tracking Results The ability to track and explain results is critical. Steve Bristol, a Cipher Data founder, notes that, “Fannie Mae says a buy-back may not be due to incorrect income numbers, but rather the agency’s inability to see how one made a given income determination. The process is very similar to when you were in school, turned in a math question and couldn’t demonstrate to the teacher how you got the answer. You didn’t get full credit.” Non-W-2 Income In addition to self-employed clients, Cipher1 supports borrowers with other non-W2 wages, such as alimony, rental income, interest or dividends that would not be revealed without extensively reviewing tax returns. It even triggers questions concerning income such as alimony and capital gains, asking the user to consider whether the income is truly recurring or not. For example, if the borrower reporting the alimony on last year’s taxes is a newlywed this year, that alimony may not recur and the user can adjust accordingly. Competitive Advantage Ultimately, the Cipher1 report helps loan officers determine whether an applicant qualifies for a lower cost and more desirable full-doc loan. That creates a strong competitive advantage for the mortgage lender. In reference to an earlier version of the Cipher1 program, Freddie Mac said, “the program should be a useful tool… It should streamline the process of underwriting tax returns.” Automatically Completes FNMA Form 1084 Cipher1 automatically populates the standard Fannie Mae Cash Flow Analysis Form 1084 as the user enters data into simple on-screen forms. Cipher1 reports fully analyze personal and business returns, pertinent schedules and forms. Income trends (similar to Fannie Mae’s 1088 Competitive Analysis), quality control items (inconsistencies), and user entries automatically adjust the 1084. The final Cipher1 report adheres to Fannie guidelines. Every step the user takes will automatically trigger the proper action on the 1084 form. The user doesn’t need to understand the process. Although Bristol observes that, after using Cipher1 a few times, they usually do. Signed, Sealed, Delivered New users can obtain Cipher1 by visiting www.cipherdata.com, where they can download the program and install it. The program is licensed and delivered on a per-seat basis with a straightforward user fee. Network users are licensed for an enterprise version of the software. About Cipher Data Cipher Data Resources, Inc. incorporated in 1997, was created to develop and market cash-flow analysis software primarily to the lending and credit industries. Cipher1 is designed for use by companies that handle or rely upon tax return cash flow analysis including FNMA, FHLMC, mortgage bankers and brokers, commercial banks, credit unions, contract underwriters, savings and loans, mortgage insurance companies and companies that securitize mortgage loan portfolios. Cipher1 has been designed to meet Fannie Mae and Freddie Mac analytical standards. In addition to providing an accurate cash flow report, Cipher1 automatically populates Fannie Mae’s 1084 Cash Flow Analysis Form. ********************************************************************************************************************************* Less choice for self-employed borrowers Define "reasonable." That's the task put upon the legal teams of the nation's largest lenders in response to new legislation in Colorado. In an effort to curb the improper use of non-traditional mortgages (stated income, alternative documentation or no income verification programs) Colorado Senate Bill 07-216 was recently passed into law. More... http://blog.inman.com/inmanblog/2007/07/new-legislation.html *********************************************************************************************************************************** Minnesota Bans "Stated Income" for Brokers Minnesota Commerce : More FAQs resulting from HF1004 and SF988 |
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